Low rates hike little comfort

RATEPAYERS will probably greatly appreciate that for the first time in years, the rates hike in Ndlambe is being kept to single digits, albeit the highest single digit figure of 9%.

This was totally unexpected, as the 11% increase seemed to be done and dusted by the time the tabled budget was approved by council at the end of May. Mayor Sipho Tandani said the reduction was made possible by “a further reduction made to overtime and casuals”.

Tandani, in his last term as mayor, will be remembered for this parting respite to hard-pressed ratepayers.

But everything has to be understood in context. The increase is never just 9% – or whatever figure is settled on – up on last year. Property valuations also go up and you pay the 9% increase on the new higher value.

There is a hidden cost in every rates hike, just as there are hidden costs in the municipal wage rises. As Tandani acknowledged in his budget speech, in between every centrally bargained annual wage increase there are notch increases as well. Say for example the staff wage rise is negotiated at 10%. The notch increases will add additional percentage points so it will actually be greater than 10%.

Ndlambe Municipality has never stuck to the guidelines of the national Treasury, which has recommended that average increases on municipal budgets should be limited to 5.5%.

Returning to Tandani’s speech, his rationale for still having a rates increase greater than Treasury’s recommendation is perplexing.

Tandani said: “I realise that the 9% is above the recommended increase of national Treasury and this is due to but not limited to the following factors:

“General staff increase as negotiated nationally plus notches has been allowed for on the operating budget; fixed expenditure has been budgeted for correctly; a capital budget has been included and although not sufficient to cover all needs will address critical areas; the increase of electricity purchased from Eskom; increase of water purchased from Amatola Water Board.”

That last item is especially pertinent. The increase in the price of water purchased from Amatola Water (and not a drop to drink yet) is included as a reason for the rates increase. But wait a minute, isn’t water going up 16% already?! So, there’s a double dip into ratepayers’ pockets to pay for Amatola Water’s exorbitantly priced and problematic projects, which this newspaper has reported on.

We hope everyone who pays rates and municipal services takes note, as we take what little comfort we can get in paying “just” 9% more.